LG – As we know, during the bankruptcy negotiations, and in a deposition or statement by one of the managers of WMI, he stated that the original plan was to not reorganize. This path would have allowed them to cancel equity and to divide all the value of the trusts amongst the shareholders rated above equity. When WMI failed to cancel equity, it changed everything for the holders of WMI shares at all levels, and the more profitable path for the large investors was to reorganize. This process allows many of them to recoup those lost gains by shorting and/or buying the common shares of WMIH. The mom and pop investors are not knowledgeable enough about the market to not lose; statistics say that 80% of them will lose their money.
When someone on this board discovered the trust funds that were off-limits to the bankruptcy, it became clear where the real value of WMI had been all the time. The value is still there – whatever that value is. For example, if trust A, B, and C each have 27 loans assigned to them, some of those loans will incur a default and the value of the trust will change. Additionally, all three trusts may have the same single loan assigned to each. This process also screws up the value of the trusts. My guess is that WMI has two sources of value in relation to the trusts. In some trusts they own the loans and part of the income stream, which is the best scenario for us. In other trusts they simply own part of the income stream generated by the trusts. The important thing to know is that because the trusts were off-limits to the bankruptcy – they are still off-limits to the bankruptcy. WMIH now owns all the value of the trusts, and in that respect, the beneficial/escrow markers are moot. Something may be afoot that will involve the markers, but the value of the trusts will end up with WMIH. At that time shareholders may hold, sell, or buy more shares. How WMIH will transfer value, based on the markers, to a shareholder who has sold all his shares and closed his trading account will be a mystery until it happens.
We are on the outside looking in. We often think things are simple and that they should move faster. It will not happen that way. We have no choice but to rely on the BOD to make better decisions than those shareholders who did not release in 2012.
Good luck to all!
